Masse Questions Minister on Cuts to Automotive Industry in Budget 2008

Wednesday, May 7, 2008


The Budget

Mr. Brian Masse (Windsor West, NDP):
Mr. Speaker, it is a pleasure to follow up on a question I asked the finance minister in relation to the auto industry and the budget in particular.

The budget, supported by the Liberals, that the Conservatives brought in has a detrimental effect on the auto industry. In fact, it is actually a cut to the auto industry.

The Minister of Finance seems to not even understand his own document. What is happening is that he is actually taking money out of automotive funding right now. Fact number one is that the ecoAuto rebate program that the Conservatives put in place is, ironically, a program that we have been fighting to get out of the budget. I am glad it is out of the budget but we wanted the money from that program reinvested in a good auto strategy.

The ecoAuto project, which was developed by the government and supported by the Liberals, had Canadian money going to Japan and Korea for foreign vehicles that were being made outside this country. They were dancing on the shop floors of Tokyo city when they heard this announcement because it meant jobs for their citizens, not jobs for Canadians. This $116 million boondoggle that was put in place did not have any correlation to reducing or putting vehicle purchase to the objectives of the program. It was an utter failure. The industry condemned it and the auto workers condemned it. We are glad it is gone.

However, why the Minister of Finance would not take that $116 million and reinvest it into auto right now, as we have gone from fourth in the world in assembly and manufacturing to tenth, is beyond me. It is very frustrating to see this opportunity of a real auto strategy lost.

What the Conservatives did lay out in the budget, which is all smoke and mirrors, is a $250 million program for automotive development. However, that is over five years so it is $50 million. What they have done is actually taken more money out of a program and lessened that amount for this new program allocation. What is really important is that they kept a new tax on automotive companies in Canada in place that will cost an estimated $50 million a year.

The Conservatives will keep a tax on automotive companies right now that will bring in the revenue which, later on, they will need to disburse through a program. What we have is a net loss of $116 million that the government should have given back to workers.

It is not just in ridings like mine in Windsor West. It also is in Oshawa, Oakville and a number of different manufacturing communities around this country, and all the services that we actually get as spinoffs and all the other Canadian aggregate that is necessary from steel, and a whole source of other industries that produce automotive.

Automotive investment right now is going through almost a revolution. We are seeing the industry, not sunsetting but changing. There are less jobs in it but, at the same time, it is higher tech and it is actually producing greener, cleaner vehicles. That is why it is important for us right now to have a clear automotive strategy.

We in Windsor have been pushing for the federal government to support a Ford plant so a new Ford engine can be produced in Windsor, Ontario, which is important because those jobs are desperately needed.

I have talked to Canadian citizens in my riding and other parts of this country who have gone to school, got the proper education and did everything necessary but because the government has refused to put in an auto policy similar to its Liberal cousins, we have witnessed the demise of the industry in many respects, and that is not acceptable. Canadians have done their part.

In my constituency, for example, we have a tool and die and mould making industry that is the best in the world but we are losing jobs because the government has not put in the policies. I call on the government to do so.

Mr. Ted Menzies (Parliamentary Secretary to the Minister of Finance, CPC):
Mr. Speaker, we are all concerned when Canadians lose their jobs. This is never an easy situation for both workers and their families. That is why we are supporting workers and communities through our $1 billion community development trust, helping build a better future through job training to create opportunities for workers, economic development to create new jobs and infrastructure development to stimulate economic diversification.

More than $357 million of this funding will flow directly to Ontario, where the government has outlined how it will use its funding in its provincial budget.

However, we must keep in mind the global economy is slowing, driven in large part by a slowdown in the U.S. The majority of the vehicles produced in Ontario are exported to the U.S., and clearly American consumers are not buying vehicles at the same rate as they once were.

While the Canadian auto sector remains strong and it continues to attract new investments, North American auto manufacturers are all experiencing market adjustments and continue to face global competitive pressures.

That is why we are ensuring the manufacturing sector, especially the automotive industry, has the tools to become more efficient and more innovative, which is vital for their long term economic success. That is why we have reduced taxes significantly on the sector, providing a major economic stimulus. Indeed, our tax relief will result in over $1 billion in benefits for the automotive sector over this and the next five years.

We have also provided $250 million for the automotive innovation fund to support strategic, large scale research and development projects by automotive and parts manufacturers in developing greener, more fuel efficient vehicles.

Additionally, we have made a $400 million investment for an access road to the new Windsor-Detroit border crossing, an investment that will directly benefit the constituents of the member opposite.

We have also enhanced the export development Canada's export guarantee program to increase the guaranteed coverage from 75% to 90%. This specifically benefits businesses in the automotive sector.

We have allocated $34 million per year for new research through the Natural Sciences and Engineering Research Council, targeted to the needs of key industries such as the auto sector.

In addition, to improve access to E85 fuels, we are giving $3 million to support E85 fuelling infrastructure and promote the commercialization of E85 fuels.

We have also cut the GST from 7% to 5% and this has lowered the costs of all new cars.
Many, including noted auto analyst Dennis DesRosiers, have been highly supportive of our approach, noting recently:
—together with previous budgets reveals the [federal government] is actually dedicating a significant amount of resources and political capital to the automotive sector and that, for the most part, this Government is taking a pro-active and positive approach to helping this industry.

Mr. Brian Masse:
Mr. Speaker, the Conservative members from Ontario should be ashamed of themselves. They know the Premier of Ontario has ruled out the community development fund to be eligible for automotive, and they are doing nothing about that situation.

This political battle between the finance minister and the province, which goes back 10 years in political history, is nonsense and is costing Canadians jobs. Workers do not care. They want projects that are supported, which actually lead to jobs and ensure the jobs stay here.

Let us be clear, the $250 million fund is from a tax on the industry. The Conservatives have put a special tax on the industry, and that is what is generating the funds for the $250 million.

The $400 million with regard to the access way in Windsor and Essex counties is from the previous budget. We recently had an announcement in Windsor, where the Conservatives worked with the provincial Liberals, and it will create a problem with the access road, which will create further delays.

Let us have a full, developed strategy, one that looks at trade conditions, that stops free trade agreements and that has conditions for the investments and jobs related to those conditions specifically. That is what needs to be done to put Canadians to work.

Mr. Ted Menzies:
Mr. Speaker, we understand that certain sectors of the economy have been particularly hard hit by global economic volatility. We have also heard clearly that some communities and workers are facing hardship and are in need of help in a timely manner.

As I mentioned previously, we have taken significant action to bolster our economy in these uncertain times and to further strengthen the foundation for Canada's future prosperity. This includes action to support Canadian businesses, workers, skills development, research and innovation and infrastructure.

While the NDP has called for direct government subsidies to certain businesses and sectors of the economy, I draw the attention of the NDP member opposite to the words today of the NDP leader in Ontario, Howard Hampton, “simply to write a really irresponsible”.

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